Options Trading News

November 28, 2012  Wed 10:44 AM CT

A trader is adjusting a huge position in the TLT Treasury exchange-traded fund as it tries to rebound.

The iShares 20+ Year Treasury Bond Fund is up 0.26 percent to $125.61. The fund, which was at an all-time high of $132.22 in late July, bounced off support at $118 in mid-September.

optionMONSTER's systems detected the sale of 22,708 January 124 puts for $1.96, far above the previous open interest of 1,671 contracts and therefore a new position. Seconds later, a block of 11,354 March 124 calls was sold for $4.15 in volume that was less than the open interest of 14,439 at the start of the day.
So it appears that the trader is unwinding a January long call position that is now in the money while selling nearer-term puts in a more neutral stance that can profit if the TLT is anywhere above $124 at expiration. (See our Education section)
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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